Blogging Redux: Show Me the ROI

In my DM News column last month, I apparently offended a segment of the blogging community by suggesting that blogs might be "an utter waste of time ... a pure vanity publication that won't pay you back even one thin dime for your effort."

Here's what all the hoopla has taught me so far: Bloggers are a tight-knit community and are rabidly enthusiastic about their medium. Many are self-described blogging "evangelists."

Their attitude toward new and untested marketing media and channels is probably a lot different than yours and mine. (I assume that you, like me, are a direct marketer.) I told virtually every blogger who said I had treated blogging unfairly the following: "We direct marketers only care about one thing in marketing: ROI (return on investment). Unless a dollar spent on a marketing test returns two or three dollars in revenues, we consider that test a failure - and cut off the promotion."

For instance, some DMers generate millions of dollars a year in direct product sales from e-zines and e-mail marketing campaigns. One I know produces upward of $40 million in annual sales from e-mail marketing.

I challenged the bloggers: "Can anyone out there show me even a single blog that produces 1 percent of that - $400,000 annual sales?" No takers, so far. Not one blogger could produce evidence of a blog generating significant, positive ROI (the cutoff figure for which I have chosen direct sales of $400,000 a year or more).

But what my challenge did produce was a bunch of passionate responses explaining to me why blogging is without question the next big thing in marketing despite its lack of discernible ROI.

"It's all about the conversation," writes Marc Orchant, feeding me The Cluetrain Manifesto's party line. "That's the point of the blog space. As a lifelong marketer myself, I find the DM industry behind the curve, generally speaking, when it comes to embracing disruptive technologies."

Reader B.L. Ochman says, "Blogs help develop a conversation between a company and its customers [and] have become an important part of the marketing mix."

As direct marketers, I'm not sure our main objective is to embrace disruptive technologies or have conversations. Isn't it more about boosting response, generating a positive ROI and beating the control?

"My argument is that blogging is more likely to raise brand awareness, but that the impact on direct sales will be more difficult to assess," says Max Blumberg. "Therefore, I don't think it is appropriate to look for a close relationship between blogging and direct sales."

Some of the writers who contacted me were eager to compare blogging with direct mail and show me that DM is inferior. Blogger Yvonne Divita states, "The small business owner cannot hope to create and support a continuing successful direct mail campaign." I'd recommend Yvonne read DM News. Every issue is packed with stories of businesses large and small making healthy profits with traditional direct mail and e-mail marketing.

Yvonne also told me that when she was a corporate assistant to the CEO of a good-sized company, "I threw all the direct mail in the circular file at my feet. The CEO didn't want to see it. So, who's really reading your client's direct mail piece?"

Yvonne seems unaware of the concepts of cost per thousand and break-even analysis, which let direct marketers make a profit even if 98 out of 100 prospects toss our mailings away without a second glance. She comments, "When a direct mail piece can only assure the sender of approximately a 2 percent to 3 percent return, you can't convince me the hundreds or thousands spent on it is worth it." Tell that to Omaha Steaks, Covenant House and Phillips!

Jennifer Rice explains that comparing blogs with direct marketing is to look at blogs from the wrong angle: "Blogging is not a direct response vehicle. It's an awareness, visibility and promotion vehicle that happens to be terrific for those of us selling intellectual capital. It's also extremely useful for corporations to use as a means to connect with customers and get feedback."

Finally, a few resources to help you learn more about blogs (I recommend both highly): First, Deb Weil's "Business Blogging Starter Kit," available at www.wordbiz.com. Deb is a blogging evangelist, but her kit contains a lot of useful how-to guidance for anyone thinking about starting a blog.

Second, get Ochman's special report, "What Can Your Company Do With a Blog?" Like Deb's, it is detailed, specific and instructional. It's available at www.whatsnextonline.com.

Recently Ms. Ochman asked me, "Do you still think blogs are baloney?" I replied: "I never thought or actually said they were baloney. I just said that, as a direct marketer, I don't think blogging - a medium with unproven ROI and uneven quality - is something we should get excited about, as the blogosphere has. I think members of the blogosphere should be applauded for their pioneering spirit ... but their evangelical enthusiasm is not yet supported by results."

I'm still highly skeptical about blogging, and I find that the majority lack quality and content (to be fair, many exceptions exist). But I think the topic warrants further investigation, which is why I have started my own blog. It's at www.bly.com/blog/blog.htm. I'll keep you posted about its successes and report periodically in this column - and of course, on my blog.

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